According to the office of National Statistics, public sector net borrowing reached £1.4billion in October. This compared with a surplus of £1.8 billion in October 2007.
Traditionally October is a strong month for the public finances as a result of tax receipts. Clearly these haven’t helped this year.
The budget forecast for 2008/09 set in March is net borrowing of £43 billion. The borrowing has already reached £37 billion and there are still 5 months left to run the full year. City analysts are suggesting that the budget deficit could now top £70 billion this year.
All this shows just how serious the Government finances are. It is going to make life pretty difficult for Alistair Darling, the Chancellor, as he announces his expected tax cuts and spending increases in his Pre-budget report next week. What will be promised?